Saudi Ethylene & Polyethylene Company (SEPC) has asked banks to provide it with SR4.6bn ($1.23bn) of new loans that will be used to refinance existing debt put in place in 2006.

The new deal was launched in mid-November and is being led by the local Banque Saudi Fransi, Samba, and Sabb – the local affiliate of the UK’s HSBC.

Sources in the kingdom say that SEPC, which is owned by the local Tasnee Petrochemicals and Sahara Petrochemicals, wants to get the deal closed before the end of the year and banks have to respond to the financing request in early December.

The new loans will replace an existing $200m Export-Import Bank of Korea (Kexim) tranche and a roughly $850m dollar commercial bank tranche. It is expected that the new deal will replace all the existing international participation with local banks funding in riyals.

One source in the kingdom says: “The new deal is being driven by the company wanting to change the covenants on its debt to reflect that is no longer a greenfield project, but has been up and running for a few years now.”

The three banks leading the refinancing are all current lenders to the project and are expected to be the only banks from the existing syndicate that remain in the deal once the refinancing is completed.